Innovation and export in SMEs: the role of relationship banking

Serena Frazzoni, Maria Mancusi, Zeno Rotondi, Maurizio Sobrero () and Andrea Vezzulli ()

No 2014/18, Working Papers Department of Economics from ISEG - Lisbon School of Economics and Management, Department of Economics, Universidade de Lisboa

Abstract: This paper assesses the role of relationship lending in explaining simultaneously the innovation activity of Small and Medium Enterprises (SME), their probability to export (i.e. the extensive margin) and their share of exports on total sales conditional on exporting (i.e. the intensive margin). We adopt a measure of informational tightness based on the ratio of firm’s debt with its main bank to firm’s total assets. Our results show that the strength of the bank-firm relation has a positive impact on both SME’s probability to export and their export margins. This positive effect is only marginally mediated by the SME’s increased propensity to introduce product innovation. We further discuss the financial and non-financial channels through which the intensity of bank-firm relationship supports SMEs’ international activities.

Keywords: margins of export; bank-firm relationships; innovation; localized knowledge spillovers. (search for similar items in EconPapers)
JEL-codes: F10 G20 G21 O30 (search for similar items in EconPapers)
Date: 2014-10
New Economics Papers: this item is included in nep-ban, nep-cse, nep-ent, nep-ino, nep-int and nep-sbm
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (26)

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Working Paper: Innovation and export in SMEs: the role of relationship banking (2014)
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